Our Position

Rural America and Farm Bill Programs

Position

  • The 2023 Farm Bill should continue to provide essential assistance to the farm sector and to rural America. Robust price support programs provide a financial safety net for many producers during times of low commodity prices.
  • The new Farm Bill should maintain a strong crop insurance program, a successful public-private partnership critical to the ability of farmers and ranchers to survive weather-related disasters and repay farm loans.
  • USDA farm loan guarantee programs benefit family farmers and ranchers and allow community banks to better manage the lending risks of producers who would otherwise be unable to obtain commercial credit. These programs should remain primarily financially geared to establishing successful farm and ranch operations. Program fee levels should not discourage participation by community bank borrowers and should not be set at levels that overfund government collections.
  • Farmer Mac should continue to focus on its primary mission of improving secondary market access for community banks. ICBA opposes allowing the Farm Credit System to operate their own secondary market independent from or in competition with Farmer Mac.
  • Climate risk policies should not increase regulatory or economic burdens, particularly for small businesses, agricultural producers, or the community banks that serve them.

Background

The USDA reports net farm income should increase by almost $20 billion from 2021 to $160.5 billion in 2022. Rural America and farm and ranch families have benefitted from low interest rates, ample energy supplies, and a de-regulatory environment. These positive factors have changed quickly, threatening the outlook for American agriculture. Congress should adjust farm programs to allow producers to manage a changed economic environment.

Congress is expected to draft and possibly finalize a new Farm Bill in 2023. The new Farm Bill should build upon the success of the 2018 Farm Bill, which expires September 30, 2023. The next Farm Bill should continue to strongly support Farm Bill provisions which are intended, in part, to provide lenders and customers a long-term policy framework for business and planning purposes and bolster the farm economy.

The Federal Crop Insurance Program (FCIP) plays a prominent role in helping producers manage financial risk, cope with weather related disasters and repay bank loans. In 2022, more than 490 million acres of farmland (90% of insurable farmland) were protected. ICBA opposes reducing spending on crop insurance.

USDA's guaranteed loan programs allow community banks to lend to higher-risk borrowers by guaranteeing 90 percent of loan repayment. Congress should increase loan limits to at least $1.75 million to allow banks to work with more family farmers. Funding set-asides should not interfere with expanding the program’s borrower base.

The 2018 Farm Bill increased population limits for rural development loans and requires most programs to be self-funding. These program changes should be evaluated.

Farmer Mac. Farmer Mac, the secondary market program for ag real estate loans, should continue to focus on improving secondary market access for community banks.

Climate Risk. Policies should not increase regulatory or economic burdens on the agricultural or community banking sectors, should be voluntary, based on scientifically sound data, and offer incentives to establish healthy soil and water resources.

Staff Contact

Mark K. Scanlan

SVP, Agriculture and Rural Policy

ICBA

[email protected]

Agriculture News

ICBA and Community Banks Celebrate America’s Ag Community

March 22, 2022

ICBA Press Release Banner 2020

National Agriculture Week is March 20-26

Washington, D.C. (March 22, 2022)—The Independent Community Bankers of America® (ICBA) and the nation’s community banks celebrate America’s local farmers, ranchers and agricultural enterprises during National Ag Day in honor of their contributions to provide safe, abundant, and affordable products that support our country’s food supply and strengthen local economies nationwide.

“Community banks have faithfully served the agriculture community, providing the lion’s share of funding, to ensure America’s land stewards have the financial support they need to remain viable and vibrant,” ICBA President and CEO Rebeca Romero Rainey said. “The agriculture sector is critical to our nation’s health and prosperity and the nation’s community banks will continue to be a partner in the success of our farmers and ranchers—in good years and lean years—as they have for more than a century.”

Community banks under $10 billion in assets provide 80 percent of all financing to agriculture from the banking sector and are often the catalysts for new and expanded business opportunities within their communities. In fact, community banks provide approximately $155 billion in agriculture loans.

National Ag Day was founded in 1973 to tell the story of American agriculture and remind citizens of agriculture’s vital role in our society. ICBA offers the following facts about the agriculture industry:

  • Small family farms account for 90% of all U.S. farms.
  • The typical American farmer produces enough food and fiber to feed 166 people, producing jobs and investment throughout the economy.
  • Farming and related industries employ 21.6 million people, making up 11 percent of total U.S. employment.
  • Community banks made 87% of all farm loans and farmland loans this past quarter.

“Community banks are proud to finance our nation's farmers and ranchers and look forward to building on this tradition of service—whenever and wherever called upon,” said Romero Rainey.

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding nearly $5.9 trillion in assets, over $4.9 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

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